Consumer sentiment dipped slightly in October but is still at its second highest level in over a year, new data from S&P Global shows.
The S&P Global UK Consumer Sentiment Index (CSI) survey has been collected monthly since 2009 and is based on a panel of 1,500 UK households. The latest data were collected between 9th – 13th October.
The latest CSI (a combination of survey gauges tracking household financial wellbeing, labour market conditions, household spending, savings and debt), fell slightly to 47.4 in October from 47.8 in September, but was the second-highest reading since the post-election peak observed in July 2024 and above the long-run average (44.4).
“The autumn is seeing some of the gloom lift from UK households. The
survey’s overall gauge of sentiment is at its second-highest since July
2024 in October, dipping only slightly from September’s recent high,” said Maryam Baluch (Economist at S&P Global Market Intelligence).
Not only are views on current finances among the highest recorded by the survey since S&P Global started collecting data back in 2009, but households also continue to express optimism regarding their financial outlook for the coming year, Baluch said.
“Key to the diminishing gloom seen in recent months are signs of solid
income growth and higher workplace activity, which have helped alleviate households’ reluctance to make major purchases. Additionally,
households found it easier to access credit. The rate at which the borrowing environment improved broadly aligned with the strengthening demand for loans.”
More encouragingly, debt levels were reduced, albeit marginally, for the irst time in seven months, indicating that households
were managing their debt obligations effectively, partly helped by the
declining borrowing costs, she said.
A black cloud over consumers
However, it’s also clear from the data that the cost of living crisis has not yet been beaten.
“Although incomes are up, households report lower levels of available cash as high bills eat into the amount of money left to spend. The gloom may be lifting, but that’s not to say households don’t remain under
considerable financial stress, with lower earners reporting particular
concerns,” said Baluch.
In more detail, the survey has shown that since the pandemic, the gap between the highest and lowest earning households has widened on average: lower earning households have been struggling more with their finances, while higher earners have generally been faring better. In the most recent survey, this trend continued with people in the very highest income group reporting that their financial situation improved, while everyone else reported a worsening.
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